Commodity Trends

The Strait of Hormuz: Reopened, Sort Of

October 21, 2026

Nom du rédacteur: Jimmy Jean, Vice-President, Chief Economist and Strategist
Marc-Antoine Dumont, Senior Economist • Florence Jean-Jacobs, Principal Economist

Highlights

Energy exports from the Middle East are recovering. Despite ongoing tensions, the latest data show volumes have rebounded to roughly 80% of their pre-war level. More and more vessels are venturing through the Strait of Hormuz. Current prices appear to justify the risk, although numerous recent attacks on ships in the region have begun to disrupt exports again.
The oil shock triggered by the conflict in Iran is, however, changing in nature. After a crude oil crisis, followed by a refined products crisis, a logistics crisis is now emerging: a shortage of tankers. The lack of available vessels reduces the likelihood of price stabilization in the very near term. Too many tankers remain tied up in the Middle East, stranded in the Persian Gulf or occupied by highly inefficient ship-to-ship transfers used to move crude out of the region. Freight rates have consequently climbed to new highs. Heavy crude is therefore accumulating in North America due to the shortage of vessels, and this regional surplus has widened the spread between WCS (Western Canadian Select) and WTI (West Texas Intermediate). That spread should eventually narrow, but the timeline remains uncertain. We expect crude oil prices to end the year at around US$80 per barrel.
Shortages of refined petroleum products persist, particularly for jet fuel and, especially, diesel. In the United States, diesel prices have surged 15.9% since August, more than double the increase recorded for gasoline prices (6.7%).
Global industrial activity has remained relatively resilient despite higher energy prices. However, the gains in metal prices seen during the first half of the year moderated over the summer. Slower manufacturing activity in Asia has tempered upward pressure on prices. In addition, stronger and more persistent inflation has prompted policy rate increases and could lead central banks to continue tightening monetary policy, particularly in the United States. Against this backdrop, metal prices are expected to remain broadly unchanged through year-end.
Gold prices have pulled back and are now trading around US$4,200 per ounce, weighed down by a stronger US dollar and higher policy rate and bond yields. Accelerating inflation continues to support the yellow metal, however, as it serves as a safe-haven asset when prices are rising rapidly. Given the continuing economic and geopolitical uncertainty, we expect gold prices to reach US$4,500 per ounce by year-end.
North American lumber prices have entered their usual seasonal slowdown after posting gains in June and July. Weakness in the US residential construction sector is limiting lumber demand. In addition, higher long-term mortgage rates are eroding affordability and discouraging potential buyers. Consequently, we don’t expect a meaningful strengthening in prices over the coming quarters, although production cuts at some sawmills will likely help, here and there, to adjust supply and rebalance the market. Meanwhile, Canadian sawmills are benefiting from a reduction in US antidumping and countervailing duties on softwood lumber, which fell from 35% to 25% on October 20. The additional 10% tariff under Section 232 remains in effect.
Global inventories of wheat, corn and soybeans appear sufficient to support stable prices, and potentially lower prices in the case of corn. However, the risk of disruptions to supply or to supply chains remains elevated. The price increases observed over the summer gave way to a partial correction over the past month. Nonetheless, a new Chinese commitment to purchase US soybeans announced on October 14 should reassure markets and support soybean prices. Wheat prices remain more unpredictable because of the ongoing uncertainty surrounding the conflict between Ukraine and Russia. Diesel and fertilizer prices remain highly volatile and continue to weigh on farmers’ profit margins. Although nitrogen fertilizer prices have returned to their pre-Iran-war levels, phosphate prices remain elevated. In the coming months, markets will also be watching developments related to El Niño, which could affect crop yields in Brazil External link..

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NOTE TO READERS: The letters k, M and B are used in texts, graphs and tables to refer to thousands, millions and billions respectively.

IMPORTANT: This document is based on public information and may under no circumstances be used or construed as a commitment by Desjardins Group. While the information provided has been determined on the basis of data obtained from sources that are deemed to be reliable, Desjardins Group in no way warrants that the information is accurate or complete. The document is provided solely for information purposes and does not constitute an offer or solicitation for purchase or sale. Desjardins Group takes no responsibility for the consequences of any decision whatsoever made on the basis of the data contained herein and does not hereby undertake to provide any advice, notably in the area of investment services. Data on prices and margins is provided for information purposes and may be modified at any time based on such factors as market conditions. The past performances and projections expressed herein are no guarantee of future performance. Unless otherwise indicated, the opinions and forecasts contained herein are those of the document’s authors and do not represent the opinions of any other person or the official position of Desjardins Group.